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What is Home Equity Release?

A comfortable lifestyle in retirement

Traditionally retirement has been a time in life when many people face a more restricted financial reality and even a significant reduction in the lifestyle to which they have become accustomed. Options have been limited:

  • Selling the family home and downsizing to release equity is an option but does not suit everybody.

  • The same can be said for renting out part of the home or taking in a lodger.

  • Many people cannot rely on, or simply do not want, financial support from family.

Home Equity Release offers a very practical solution. It gives people access to the value they have built up in their home for their own use in their retirement years and is an appropriate option for many looking to maintain or create a comfortable lifestyle or to meet an unexpected financial need.

Not all Home Equity Release schemes are the same

There are two completely different forms of Home Equity Release available to those in their retirement years:

  • Home Reversion Schemes, in which you are not borrowing against the value of your home but rather selling part of it. This is really a property transaction in which you give up full ownership of your house. It creates 'winners and losers' - if you die earlier than expected the home reversion company will have paid you too little for the share of the property that they bought. Seniors Money does not offer home reversions.

  • Lifetime Loans (sometimes called lifetime mortgages or reverse mortgages), in which you borrow against the value of your home and retain 100% ownership of it. The loan is not repaid until you permanently move out or upon your death, so it grows over time as interest is added to the balance. Seniors Money only offers Lifetime Loans.

Not all Lifetime Loans are the same

Lifetime Loans are available as either fixed rate loans or variable rate loans.

  • Fixed rate loans can appear attractive because you know in advance exactly how much the loan will grow to over any specified period and you will not have to think about fluctuations in interest rates. However there is usually very little flexibility in how and when the money can be borrowed and penalties to be paid if the loan is repaid early.

  • Variable rate loans allow great flexibility, both at the outset of the loan and into the future. Most people under-estimate how long they are going to live for and how much their circumstances can change in retirement. Fluctuating interest rates do not affect the borrower month to month (there are no monthly repayments being made) whilst studies show that over long periods fixed rates have cost more than variable rates. We believe that variable rate loans are far more suitable for people at this stage of life and only offer this option.

In every market we operate in we set the standard for product quality and fairness. By choosing a variable rate Lifetime Loan from Seniors Money you can be assured that:

  • You will be able to borrow the amount you actually need right now and apply for more later if you need it (subject to approval and availability of funds at that later date). This can save a lot of money in interest payments and eliminates the pressure of trying to work out today how much to borrow to cover all future eventualities.

  • You will not have to pay penalties if you decide to repay early.

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If you have any queries please
give us a call:
LoCall 1890 73 64 67
(1890 SENIOR)
Seniors Money Ireland Ltd
38 Pembroke Road             
Ballsbridge                         
Dublin 4                              
info@seniorsmoney.ie